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| Husqvarna faces lower earnings due to costs for personnel cutbacks Swedish garden tools maker Husqvarna said its operating income for the fourth quarter 2008 will be substantially lower than in the previous year. The decline is due to lower sales and production volumes, as well as costs related to the previously announced personnel cutbacks which will be implemented faster than expected. The total remaining cost related to the cutbacks will be charged against operating income in the fourth quarter. Demand has gradually weakened during the quarter in all of the group's product areas. Retailers have become increasingly cautious about building up inventories for the 2009 season, which has in turn increased uncertainty regarding remaining deliveries in December. Operating income for the fourth quarter of 2008 has been negatively affected by lower sales and production volumes and will be negative, also excluding the cost of approximately SEK 325m related to the personnel cutbacks. The announced personnel cutbacks are now estimated to involve a total reduction of approximately 960 employees, as against the previously stated 850. The total cost is estimated at approximately SEK 340m, of which SEK 15m were charged against operating income in the third quarter of 2008 and the remaining SEK 325m will be taken in the fourth quarter of 2008. Annual savings are estimated at approximately SEK 350m and are expected to take full effect as of the third quarter of 2009. In the group's report for the first nine months of 2008, the estimated total cost for the personnel cutbacks was estimated at approximately SEK 300m, of which SEK 200m was expected to be taken in the fourth quarter and approximately SEK 85m in the first quarter of 2009. Annual savings were then estimated at approximately SEK 300m. write your comments about the article :: © 2008 Construction News :: home page |